Here is how
The Catechism of the Council of Trent (published 1566 AD) defines the sacraments.
Definition of a Sacrament
Besides the meaning of the word, which has hitherto engaged our attention, the nature and efficacy of the thing which the word signifies must be diligently considered, and the faithful must be taught what constitutes a Sacrament. No one can doubt that the Sacraments are among the means of attaining righteousness and salvation. But of the many definitions, each of them sufficiently appropriate, which may serve to explain the nature of a Sacrament, there is none more comprehensive, none more perspicuous, than the definition given by St. Augustine and adopted by all scholastic writers. A Sacrament, he says, is a sign of a sacred thing; or, as it has been expressed in other words of the same import: A Sacrament is a visible sign of an invisible grace, instituted for our justification.
"A Sacrament is a Sign"
The more fully to develop this definition, the pastor should ex plain it in all its parts. He should first observe that sensible objects are of two sorts: some have been invented precisely to serve as signs; others have been established not for the sake of signifying something else, but for their own sakes alone. To the latter class almost every object in nature may be said to belong; to the former, spoken and written languages, military standards, images, trumpets, signals, and a multiplicity of other things of the same sort. Thus with regard to words; take away their power of expressing ideas, and you seem to take away the only reason for their invention. Such things are, therefore, properly called signs. For, according to St. Augustine, a sign, besides what it presents to the senses, is a medium through which we arrive at the knowledge of something else. From a footstep, for instance, which we see traced on the ground, we instantly infer that some one whose trace appears has passed.
Proof From Reason
A Sacrament, therefore, is clearly to be numbered among those things which have been instituted as signs. It makes known to us by a certain appearance and resemblance that which God, by His invisible power, accomplishes in our souls. Let us illustrate what we have said by an example. Baptism, for instance, which is administered by external ablution, accompanied with certain solemn words, signifies that by the power of the Holy Ghost all stain and defilement of sin is inwardly washed away, and that the soul is enriched and adorned with the admirable gift of heavenly justification; while, at the same time, the bodily washing, as we shall hereafter explain in its proper place, accomplishes in the soul that which it signifies.
Proof From Scripture
That a Sacrament is to be numbered among signs is dearly inferred also from Scripture. Speaking of circumcision, a Sacrament of the Old Law which was given to Abraham, the father of all believers," the Apostle in his Epistle to the Romans, says: And he received the sign of circumcision, a seal of the justice of the faith. In another place he says: All we who are baptised in Christ Jesus, are baptised in his death, words which justify the inference that Baptism signifies, to use the words of the same Apostle, that we are buried together with him by baptism into death.
Nor is it unimportant that the faithful should know that the Sacraments are signs. This knowledge will lead them more readily to believe that what the Sacraments signify, contain and effect is holy and august; and recognising their sanctity they will be more disposed to venerate and adore the beneficence of God displayed towards us.
"Sign of a Sacred Thing" : Kind of Sign Meant Here
We now come to explain the words, sacred thing, which constitute the second part of the definition. To render this explanation satisfactory we must enter somewhat more minutely into the accurate and acute remarks of St. Augustine on the variety of signs.
Natural Signs
Some signs are called natural. These, besides making themselves known to us, also convey a knowledge of something else, an effect, as we have already said, common to all signs. Smoke, for instance, is a natural sign from which we immediately infer the existence of fire. It is called a natural sign, because it implies the existence of fire, not by arbitrary institution, but from experience. If we see smoke, we are at once convinced of the presence of fire, even though it is hidden.
Signs Invented By Man,
Other signs are not natural, but conventional, and are invented by men to enable them to converse one with another, to convey their thoughts to others, and in turn to learn the opinions and receive the advice of other men. The variety and multiplicity of such signs may be inferred from the fact that some belong to the eyes, many to the ears, and the rest to the other senses. Thus when we intimate any thing to another by such a sensible sign as the raising of a flag, it is obvious that such intimation is conveyed only through the medium of the eyes; and it is equally obvious that the sound of the trumpet, of the lute and of the lyre - instruments which are not only sources of pleasure, but frequently signs of ideas - is addressed to the ear. Through the latter sense especially are also conveyed words, which are the best medium of communicating our inmost thoughts.
Signs Instituted By God
Besides the signs instituted by the will and agreement of men, of which we have been speaking so far, there are certain other signs appointed by God. These latter, as all admit, are not all of the same kind. Some were instituted by God to indicate something or to bring back its recollection. Such were the purifications of the Law, the unleavened bread, and many other things which belonged to the ceremonies of the Mosaic worship. But God has appointed other signs with power not only to signify, but also to accomplish (what they signify).
Among these are manifestly to be numbered the Sacraments of the New Law. They are signs instituted not by man but by God, which we firmly believe have in themselves the power of producing the sacred effects of which they are the signs.
Kind of Sacred Thing Meant Here
We have seen that there are many kinds of signs. The sacred thing referred to is also of more than one kind. As regards the definition already given of a Sacrament, theologians prove that by the words sacred thing is to be understood the grace of God, which sanctifies the soul and adorns it with the habit of all the divine virtues; and of this grace they rightly consider the words sacred thing, an appropriate appellation, because by its salutary influence the soul is consecrated and united to God.
In order, therefore, to explain more fully the nature of a Sacrament, it should be taught that it is a sensible object which possesses, by divine institution, the power not only of signifying, but also of accomplishing holiness and righteousness. Hence it follows, as everyone can easily see, that the images of the Saints, crosses and the like, although signs of sacred things, cannot be called Sacraments. That such is the nature of a Sacrament is easily proved by the example of all the Sacraments, if we apply to the others what has been already said of Baptism; namely, that the solemn ablution of the body not only signifies, but has power to effect a sacred thing which is wrought interiorly by the operation of the Holy Ghost.
Other Sacred Things Signified By The Sacraments
Now it is especially appropriate that these mystical signs, instituted by God, should signify by the appointment of the Lord not only one thing, but several things at once.
All The Sacraments Signify Something Present, Something Past, Something Future:
This applies to all the Sacraments; for all of them declare not only our sanctity and justification, but also two other things most intimately connected with sanctification, namely, the Passion of Christ our Redeemer, which is the source of our sanctification, and also eternal life and heavenly bliss, which are the end of sanctification. Such, then, being the nature of all the Sacraments, holy Doctors justly hold that each of them has a threefold significance: they remind us of something past; they indicate and point out something present; they foretell something future.
Nor should it be supposed that this teaching of the Doctors is unsupported by the testimony of Holy Scripture. When the Apostle says: All we who are baptised in Christ Jesus, are baptised in his death, he gives us clearly to understand that Baptism is called a sign, because it reminds us of the death and Passion of our Lord. When he says, We are buried together with him by baptism into death; that as Christ is risen from the dead by the glory of the Father, so, we also may walk in newness of life, he also clearly shows that Baptism is a sign which indicates the infusion of divine grace into our souls, which enables us to lead a new life and to perform all the duties of true piety with ease and cheerfulness. Finally, when he adds: If we have been planted together in the likeness of his death, we shall be also in the likeness of his resurrection, he teaches that Baptism clearly foreshadows eternal life also, which we are to reach through its efficacy.
A Sacrament Sometimes Signifies The Presence Of More Than One Thing
Besides the different significations already mentioned, a Sacrament also not infrequently indicates and marks the presence of more than one thing. This we readily perceive when we reflect that the Holy Eucharist at once signifies the presence of the real body and blood of Christ and the grace which it imparts to the worthy receiver of the sacred mysteries.